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Dish Network continued to widen its subscriber loss in the first quarter, which the company attributed to seasonality as well as poor execution.
The company reported a loss of 462,000 net pay TV subscribers in the three months ended March 31, compared to a year ago, falling to 10.2 million. Sling TV subscribers fell to 2.2 million for the quarter, down from 2.5 million a year earlier.
Dish also reported a decrease of 343,000 retail wireless net subscribers from a year earlier.
“We had higher than expected customer attrition following the football season, but the bottom line is we simply didn’t execute to the level we expected,” Dish CEO W. Erik Carlson said on the earnings call.
Dish Network reported net income of $433 million, down from $630 million in the year-earlier quarter. The company reported diluted earnings per share of $0.68, down from $0.99 per share during the same period in 2021.
Even more shocking to Wall Street was the fact that the company’s free cash flow turned negative for the quarter. Company executives attributed the downturn to investments being made in its wireless network.
“The reality is that Dish’s retail satellite TV business is losing subscribers, revenues, and EBITDA (the rate of decline in Sling TV subscribers was a particular shock), and their retail Wireless business isn’t just losing subscribers (rapidly), its EBITDA has actually turned negative,” a team of MoffettNathanson analysts wrote in a note on Friday.
Shares were plummeting by 10 percent on Friday morning.
In addition to seasonality, the company was also involved in a local programming dispute with Tegna. The two companies resolved the dispute in February, allowing Dish TV to broadcast the Super Bowl and the Winter Olympics.
Dish reached a proposed settlement in February with T-Mobile over the shutdown of its 3G CDMA network. The settlement, however, is still awaiting the approval of the Department of Justice. That delay, as well as the loss of subscribers from the shutdown of the network on March 31, has negatively impacted Dish Network’s “ability to compete,” according to Carlson.
The company has planned an analyst day next week in Las Vegas, at which time it is expected to present its retail wireless plans.
“Our best days are certainly ahead of us here,” Carlson said on the call.
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